Among the distributional effects of climate policies, labour market impacts can be particularly large if significant skill gaps exist between ‘green’ (e.g. wind turbine technician) and ‘brown’ (e.g. extraction worker) occupations. We exploit historical increases in energy prices between 1995 and 2011 to replicate a scenario with a large increase in the stringency of climate policies, and assess the employment effects for different groups of workers in 15 industrial sectors in Europe. Our main finding is that, keeping everything else constant, such large increase in policy stringency explains approximately 13% of the historical increase in the demand of middle and high technical skills. The market contracts for, as with automation and globalization, low-skilled manual workers, but the effects are small accounting for 6% of their historical decline. Importantly, total employment effects are negative, very small and often statistically insignificant, but concentrated in polluting industries. As such, the retraining investment for the low carbon transition should be directed to provide middle-level technical skills to low-skilled manual workers.